NPVR

NPVR is an acronym for Network Personal Video Recorder. Its function is similar to that of a digital video recorder except it stores it content on a network instead of a local hard disk. The technology operates in the same manner as VOD except the consumer decides what to record rather than the operator. There is a large concern about the legality of this approach under the Sony Betamax ruling and it is currently being tested in court.

On March 22, 2007, the court case was decided against Cablevision which is considering whether to appeal. The judge said that is was a service versus an appliance such as a home DVR/PVR and therefore it was a resale of programming versus a private use.

On August 4, 2008 the U.S. Court of Appeals for the Second Circuit ruled in favor of Cablevision

The decision of the U.S. Court of Appeals for the Second Circuit in The Cartoon Network LP, LLLP v. CSC Holdings Inc. (a.k.a. the Cablevision Systems Corp. (NYSE: CVC - message board) network DVR case ) is a refreshing example of common sense jurisprudence. (See Court Resurrects Cablevision's Network DVR .)

At issue is whether a digital video recording service offered to cable subscribers using a hard drive located in an MSO-owned data center should operate under the same content copyright rules as a DVR offering that runs on a set-top box hard drive installed in a subscriber's home. The Second Circuit said yes, overturning an earlier decision against Cablevision by the U.S. District Court for the Southern District of New York. (See Net DVR Still Appealing for Cablevision and Cablevision Appeals Decision.)

The judicial opinion offers an interesting tour through video copyright case law, and its conclusions may have important implications for both cable operators and Internet video providers.

First, while ruling in favor of Cablevision, the court's decision is very narrow in scope. It finds that Cablevision's network DVR service does not directly infringe on the copyrights of cable TV programmers. However, the decision does not rule on whether a network DVR service constitutes contributory copyright infringement. The opinion notes:

Our refusal to find Cablevision directly liable on these facts is buttressed by the existence and contours of the Supreme Court's doctrine of contributory liability in the copyright context… doctrine of contributory liability stands ready to provide adequate protection to copyrighted works.

You can be sure that the programmers will first work to have this decision on direct infringement overturned by the U.S. Supreme Court. If that effort fails, it seems likely they would try another line of attack against Cablevision for contributory infringement. In other words, since Cablevision is not out fully of the woods, don't expect network DVR to become a commercial service anytime soon.

Second, the court's decision appears to apply specifically to a network DVR service offered by a cable television provider. Indeed, the opinion specifically excludes the possibility that it could be interpreted as broadly protecting network-based media storage and remote access. The court wrote:

This holding, we must emphasize, does not generally permit content delivery networks to avoid all copyright liability by making copies of each item of content and associating one unique copy with each subscriber to the network, or by giving their subscribers the capacity to make their own individual copies.Third, Google (Nasdaq: GOOG - message board)'s YouTube Inc. may be on track for a major smack-down by the court weighing copyright infringement claims by Viacom Inc. (NYSE: VIA - message board). Here's why:

In the original decision against Cablevision, the district court in New York agreed with the programmers that the MSO's network DVR application violated their copyrights in three ways.

One, it concluded that briefly storing data (we're talking about less than two seconds here) in an ingest buffer from a video switch constituted making an illegal copy of protected content. Two, recording the video content onto a server also violated a programmer's reproduction rights. Three, streaming the recorded video from the server to the customer's home constituted an illegal public performance of the copyrighted work.

The Second Circuit decision overturned each of these conclusions. On the first count, the court found that that the amount of data of a given work in a video switch buffer is so minuscule, and its life in the buffer is so short, that it cannot reasonably be considered to be a copy at all. On the second issue of storing a recorded video program on a remote server, the court held that because customers initiate the request to record the program as part of a network DVR subscription service, they are responsible for recording the program, not Cablevision, much like a VCR or in-home DVR.

And lastly, playback of the recorded program over the network did not constitute a public performance because a specific piece of video content was recorded by a single subscriber and then played back by that same subscriber. In other words, the video is not transmitted to the general public.

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